733 results
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2. The impact of climate transition risk on firms’ value – evidence from select Indian-listed companies
- Author
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Mondal, Amitava and Bauri, Somnath
- Published
- 2024
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3. Plos One - Supporting data for paper: Comparing the cost effectiveness of nature-based and artificial adaptation: a case study from the Gulf Coast of the United States
- Author
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Reguero, Borja
- Subjects
climate change ,green infrastructure ,cost benefit ,nature-based ,Climate Risk ,Coastal adaptation ,natural infrastructure ,Ecosystem-based adaptation ,Gulf Coast ,risk reduction - Abstract
Supportind data for paper.
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- 2022
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4. The impact of climate risk on accounting conservatism: evidence from developing countries
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Khalifa, Maha, Zouaoui, Haykel, Ben Othman, Hakim, and Hussainey, Khaled
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- 2024
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5. The impact of hurricanes on a property portfolio: an empirical study based on loss data in Portugal
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Hauser, Andrea, Rosa, Carlos, Esteves, Rui, Bugalho, Lourdes, Moura, Alexandra, and Oliveira, Carlos
- Published
- 2024
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6. Discussion Paper on Collaborative Business Models between Banks and FinTech for Green & Sustainable Growth
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Manoj Kumar Singh
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Sustainable development ,Incentive ,Product design ,Climate risk ,Corporate governance ,Context (language use) ,Business ,Business model ,Sustainable growth rate ,Industrial organization - Abstract
The discussion paper aims to solicit response from different stakeholders, including supervisory agencies, for understanding the risks and likely benefits of collaborative business models between banks and FinTech with an added emphasis on bringing coherence in multiple supervisory priorities like promoting FinTech,addressing climate-risks and sustainable development (SDGs).Though business models for collaboration vary in different jurisdictions, few important examples can be taken to identify common elements that can be replicated in other jurisdictions. The risks inherent in such business models especially in the context of immaturity of such business models, incompatible governance framework, moral-hazard and opaque incentive structures, among others, need to be carefully weighed in terms of benefits relating to market efficiency through better product design and wider distribution. Further questions for discussion are presented in the Annex.
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- 2020
7. Climate risk, climate risk distance and foreign direct investment
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Xing, Zhaopeng and Wang, Yawen
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- 2023
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8. An Introduction to the Climate-Smart Agriculture Papers
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Andreea Nowak, Evan H. Girvetz, David Rohrbach, and Todd S. Rosenstock
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Value (ethics) ,Food security ,Agriculture ,business.industry ,Climate risk ,Production (economics) ,Climate change ,Business ,Investment (macroeconomics) ,Environmental planning ,Additional research - Abstract
Over the last decade, international concerns about climate change have stimulated broad investment in the pursuit of agriculture that is more climate-smart. These concerns are particularly pressing in Africa, where most farmers remain severely impoverished and dependent on rain-fed production systems. This volume collates some of the latest research from agricultural scientists working to speed up the development and adoption of more climate-smart farming systems in eastern and southern Africa. These 25 papers highlight ongoing efforts to better characterise climate risks, develop and disseminate climate-smart varieties and farm management practices, and integrate these technologies into well-functioning value chains. The papers emphasise the additional research efforts needed to improve the understanding and response to climate risk. The expert authors also make suggestions for strengthening the responsiveness of agricultural research and extension systems to future climate changes.
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- 2018
9. Hedging potentials of green investments against climate and oil market risks
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Adediran, Idris A., Swaray, Raymond, Orekoya, Aminat O., and Kabir, Balikis A.
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- 2023
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10. Money at risk: climate change and performance of Canadian banking sector
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U-Din, Salah, Nazir, Mian Sajid, and Shahzad, Aamer
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- 2023
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11. Climate risks and their implications for commercial property valuations
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Sayce, Sarah Louise, Clayton, Jim, Devaney, Steven, and van de Wetering, Jorn
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- 2022
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12. Climate and Economic Policy Uncertainty in Commodities: A Wavelet Approach For Wheat Futures and Spot Prices.
- Author
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BARBERÀ-MARINÉ, MARIA-GLÒRIA, BARIVIERA, AURELIO F., FABREGAT-AIBAR, LAURA, and SORROSAL-FORRADELLAS, MARIA-TERESA
- Subjects
COMMODITY futures ,ECONOMIC policy ,ECONOMIC uncertainty ,SPOT prices ,GOVERNMENT policy on climate change - Abstract
Commodities are usually used to diversify portfolios. However, their prices are affected by uncertain phenomena such as economic crises, political events, climate risk, etc. This paper examines how Climate and Economic Policy Uncertainty (measured by the CPU and GEPU indices, respectively) affect to wheat prices in the spot and future markets. By combining the wavelet transform and coherence analysis it is possible to see, graphically, the relationship between two time series and also to analyze it at different time frequencies. Although wheat spot and future prices have a similar behavior, the main results obtained in this paper show that the relationships between CPU and GEPU with future prices are stronger than with spot prices. Furthermore, futures and CPU exhibit synchronous movements, whereas futures and GEPU demonstrate antiphase behavior. However, in both cases (futures and spots) their relationship with CPU/GEPU is bounded to several time periods and some frequencies. [ABSTRACT FROM AUTHOR]
- Published
- 2024
13. Unravelling the Missing Link: Climate Risk, ESG Performance and Debt Capital Cost in China.
- Author
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Yan, Yu, Cheng, Xinman, and Ong, Tricia
- Abstract
The concept of sustainability has developed significantly from an unrealistic abstract ideology to a framework that can measure companies' environment, society and corporate governance (ESG) performance. While extensive research has established some relational impacts of ESG performance on debt capital cost (DCC), this paper contends that a comprehensive review of these impacts is incomplete without screening them through the lens of climate risk (CR). Companies are subjected to CR that comprises physical and transition factors resulting from climate change. This paper aims to unravel the missing link between CR and ESG performance, and the consequent impacts on DCC. This paper illustrates using Chinese companies that operate in an emerging economy with robust industrial activities under intense global scrutiny to achieve emission reduction and meet carbon neutrality goals. Through considering CR, the impacts of ESG performance on DCC are explained using panel data and mediation effect tests with A-share listed enterprises on the Shanghai and Shenzhen stock exchanges from 2016 to 2020. The findings show that ESG performance significantly and negatively affects DCC, with debt default risk playing a mediating role. The negative effect of ESG performance on DCC is more significant in non-polluting enterprises and non-state-owned enterprises. [ABSTRACT FROM AUTHOR]
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- 2024
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14. Climate risk and private participation projects in infrastructure : Mitigating the impact of locational (dis)advantages
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Lupton, Nathaniel C., Jiménez, Alfredo, Bayraktar, Secil, and Tsagdis, Dimitrios
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- 2021
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15. Flood Risk Exposures and Mortgage-Backed Security Asset Performance and Risk Sharing.
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Dice, Jacob, Hossain, Mallick, and Rodziewicz, David
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MORTGAGE-backed securities ,ASSET management ,RISK sharing ,FLOOD risk ,BOND market - Abstract
The distribution of risks for residential real estate, including flood risk, depends largely on how these risks are allocated across individual mortgages and within mortgagebacked securities (MBS). This paper is the first to document how flood risks relate not only to individual mortgage performance and underwriting, but also how flood risks correlate to MBS performance and structure. Across residential mortgages we find that defaults are concentrated among the most flood-prone properties and this risk is somewhat offset by larger down payments and slightly higher mortgage rates. Even when mortgages are combined into MBS's, we show that average mortgage default within MBS's increases with average flood risk and that higher flood risk is primarily offset by increased credit protection or subordination; a one unit increase in flood risk is associated with a 2.6 percent increase in subordination. Ultimately, our analysis suggests that flood risk is reflected in mortgage-level performance and pricing and is partially, but not fully, accounted for in MBS deal-level performance and structure. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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16. The impact of climate vulnerability on new firm formation.
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Anton, Sorin Gabriel
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CLIMATE change ,QUANTILE regression ,GOVERNMENT policy ,ENTREPRENEURSHIP ,HETEROGENEITY - Abstract
The aim of the paper is to examine the influence of climate vulnerability (CV) on the formation of new firms. Employing a large sample of 140 countries spanning the time frame 2006–2020, it has been found that climate vulnerability harms new firm formation. The empirical results show that the negative impact of CV on the average new business formation rate has been 3.40. The results prove to be robust for alternative subsamples and methodology. Furthermore, the results of the quantile regression highlight a parameter heterogeneity in the effect of CV on entrepreneurial activity. Overall, the empirical findings highlight the key role of climate vulnerabilities in developing public policies aimed to spur entrepreneurial activity. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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17. Primary BIM dataset for refurbishing flood risk vulnerable housing in the UK
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Kim, Ki Pyung and Park, Kenneth S.
- Published
- 2016
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18. Financing the orderly transition to a low carbon economy in the EU: the regulatory framework for the banking channel.
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Nieto, María J. and Papathanassiou, Chryssa
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INVESTOR protection ,CORPORATION reports ,GREENHOUSE gases ,ACCOUNTING standards ,INTERNATIONAL cooperation ,BANKING industry ,FINANCIAL risk ,TRANSITION economies - Abstract
Among the largest economies of the world, the EU not only has set the most ambitious and legally binding objectives for the reduction of the GHG emissions but also it has accompanied these objectives with a "state of the art" regulatory framework in the realms of investor protection and safety and soundness. Our paper focuses on the bank financing channel and highlights regulatory areas for improvement. To mobilize the necessary funds worldwide, a degree of interoperability of regional taxonomies is required, which calls for international cross-pollination and coordination to mitigate financial risks and the risk of harmful market fragmentation (BCBS 2022, FSB 2022). Also, the full interoperability between the international and the EU corporate reporting standards is a desirable objective. A building bloc methodological approach would make such interoperability easier having the sustainability impact perspective of the "double materiality objective" as an additional layer of the international requirements well understood to all investors in EU undertakings. As per the inclusion of climate risks in prudential regulation, it is completed for Pillar 3 disclosures relating effectively with the EU Taxonomy. Climate risk's long-term horizon still needs to be implemented in Pillar 2 by linking bank transition plans with stress testing based on climate risk scenario analysis covering both transition and physical risk. The inclusion of climate risks in Pillar 1 faces challenges similar to those of supervisors internationally. Fostering global ambition is an explicit objective of the EU. Its leadership on the realms of investor protection and prudential regulation of climate risks should ideally inform international cooperation and impregnate international standards. This will secure that investments for the fulfillment of the EU climate objectives will flow from in and outside the EU. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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19. Bank Competition and Strategic Adaptation to Climate Change.
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Kim, Dasol, Olson, Luke M., and Phan, Toan
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BANKING industry ,CLIMATE change ,NATURAL disasters ,MORAL hazard - Abstract
How does competition affect banks’ adaptation to emergent risks for which there is limited supervisory oversight? The analysis matches detailed supervisory data on home equity lines of credit with high resolution flood projections to identify climate risks. Following Hurricane Harvey, banks updated their internal risk models to better reflect flood risk projections, even in areas unaffected by the disaster. These updates are only detected in banks with exposures to the disaster, indicating heterogeneous bank learning. We use this heterogeneity to identify how bank adaptation is affected by competition. Exposed banks reduce lending to areas with higher flood risks, but only in less competitive markets, suggesting that competition fosters risk-taking over risk mitigation. Additionally, banks are less likely to adapt in markets where competitors are also less likely to do so, suggesting a strategic complementarity in bank adaptation. More broadly, our paper sheds light on the role of competitive forces in how banks manage emerging risks and relevant supervisory challenges. [ABSTRACT FROM AUTHOR]
- Published
- 2024
20. The marginal impact of predicted climate risk scenarios on portfolio credit risk stress testing.
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Campino, Jonas de Oliveira
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CREDIT risk ,SOVEREIGN risk ,RISK managers ,LOANS ,DATABASES ,CREDIT ratings ,CAPABILITIES approach (Social sciences) - Abstract
This paper adapts the methodology developed by de Oliveira Campino et al. (June 2021) to account for predicted climate risk shocks' impact on a sovereign portfolio's credit quality on a forward-looking basis and in probabilistic terms. In particular, the portfolio stress testing capability is enhanced by adjusting the severity of the credit shocks to account for climate risk-related events on an additive basis. The benefit to risk managers is that it allows understanding of the impact of climate risk in marginal terms in relation to the original credit shock. The recently created NGFS (the Network for Greening the Financial System) database makes this exercise possible. Moreover, the described approach translates the marginal impact of climate risk scenarios on the portfolio's credit risk stress testing into capital adequacy metrics dislocations, which facilitates communicating the marginal impact of climate risk scenarios as capital consumption amounts. The paper presents an overview of the underlying model, and the methodological approach developed to adapt the credit risk stress-testing capabilities to account for climate risk using the NGFS database. Moreover, it applies the methodology to a hypothetical sovereign loan portfolio and discusses the results. Over the period considered, the study finds that the transition aspect of climate risk has a more pronounced marginal impact on a sovereign portfolio's credit risk than the chronic physical aspect of climate risk. Moreover, the results indicate that as the world takes action to transition away from carbon, the credit risk of sovereign portfolios may be exacerbated, especially if there are delays and a lack of coordination across countries and sectors. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
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21. CLIMATE RISK IN BANKS – THE CASE OF POLISH BANKING SECTOR.
- Author
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NOCOŃ, ALEKSANDRA
- Subjects
BANKING industry ,CLIMATE change ,SCIENTIFIC community ,HAZARDS ,AWARENESS - Abstract
Objectives: The issues of environmental protection, including stopping the degrading climate change, are currently a subject of particular interest of the scientific community, policymakers, practitioners, but also all people around the world. Banking institutions, as a giver of capital, play a special role in financing climate protection activities. On the other hand, they are particularly exposed to climate risk, identified with the probability that extreme natural hazards may cause adverse effects, including the loss of people’s lives, their property or other economic assets, which became the main research topic in the article. The main purpose of the paper is climate risk exegesis and to analyze the degree of climate risk inclusion in the bank risk management process in the case of the Polish banking sector. The conducted empirical research verified the research hypothesis stating that the Polish banking sector is becoming more and more oriented towards the climate risk among the bank risk management systems. Material and methods: The following research methods were used in the paper: survey questionnaire method, case study analysis, observation method and synthesis method. The research procedure included two stages of questionnaire research, followed by the analysis and evaluation of the obtained results. Results: It has been shown that the Polish banking sector defines its climate goals and is increasingly sensitive to the climate risk management, including them in its risk management systems. It also assesses exposure to climate risk in terms of physical and transitional risk. Conclusions: The research and results presented in this study are important in building political awareness as well as public, social and economic activities in the field of counteracting climate threats. However, banks’ awareness is very important for financing projects that reduce degrading impact on climate. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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22. Climate and carbon risk of tourism in Europe.
- Author
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Steiger, Robert, Demiroglu, O. Cenk, Pons, Marc, and Salim, Emmanuel
- Subjects
- *
TOURISM , *TOURISTS , *CLIMATE change , *GREENHOUSE gas mitigation - Abstract
Europe accounts for 51% of international tourist arrivals and the tourism industry provides about 10% of workplaces in Europe. Tourism will be impacted by climate change in a diverse number of ways. At the same time, tourism is also a significant contributor of greenhouse gas emissions. The aim of this article is, therefore, to provide an assessment of climate and carbon risks for the European tourism industry based on a systematic literature review. Climate risk is the dominant category with 313 papers (74%), while 110 papers (26%) were on carbon risks. The following gaps were identified: geographical gaps, especially in countries of the former Soviet Union and former Yugoslavia; a lack of coherent studies on national tourism's and its sub-sectors' emissions; research addressing how climate policies might affect tourism demand; assessments of the integrated carbon and climate risks; lack of evidence on the link between tourism climate indicators and tourism demand; lack of climate change and tourism studies addressing policy and institutional tools for adaptation and implementation of adaptation measures in destinations; and research on rising sea levels and coastal erosion and its impacts on tourism destinations and demand. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
23. Environmental data and scores: Lost in translation.
- Author
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Bernardini, Enrico, Fanari, Marco, Foscolo, Enrico, and Ruggiero, Francesco
- Subjects
SUSTAINABLE investing ,INVESTORS ,INVESTMENT analysis ,PORTFOLIO management (Investments) ,DISEASE risk factors ,ENVIRONMENTAL reporting - Abstract
This paper investigates methodological issues and limited coverage of providers' environmental scores, which are increasingly employed by investors, financial institutions and policymakers for corporate environmental assessment. The contribution of the paper is twofold. First, regression analysis shows a substantial heterogeneity among the environmental scores of seven providers in the reliance on raw data. However, as some variables are found meaningful across providers, the request to enhance disclosure should focus on such variables. The heterogeneity of the unexplained component of the regression across providers can be arguably referred to as judgemental factors and underlines the providers' different focus on financial risk or environmental impact. Second, we propose a classification system based on corporate disclosure data that aims to enable investors to extend the environmental assessment of companies not rated by providers. This system has been calibrated to implement two common investment strategies, that is, best‐in‐class and exclusion and allows to build portfolios with both environmental and financial profiles similar to portfolios based on providers' scores. The work aims to contribute to the intersection between the analysis of methodologies of E‐scores and their practical use for investment purposes. Rather than asking for a mirage of full comparability of E‐scores, the paper substantiates that is of utmost importance to improve the disclosure of corporate data to enhance the environmental assessment as well as the transparency on providers' methodologies to enable investors to select E‐scores consistent with their risk‐impact preferences. Such transparency will foster the development of sustainable finance. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
24. Assessing climate-induced risks to urban railway infrastructure
- Author
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Garmabaki, A. H. S., Naseri, Masoud, Odelius, Johan, Famurewa, Stephen, Asplund, Matthias, and Strandberg, Gustav
- Published
- 2024
- Full Text
- View/download PDF
25. The impact of climate risk on credit supply to private and public sectors: an empirical analysis of 174 countries.
- Author
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Li, Shouwei, Li, Qingqing, and Lu, Shuai
- Subjects
PUBLIC sector ,PRIVATE sector ,CREDIT risk ,BANKING industry ,LOW-income countries ,HIGH-income countries ,COUNTRIES - Abstract
In recent years, risk has been increasingly a long-term environmental problem that cannot be underestimated due to its tremendous impacts on various sectors including banking sector. Accordingly, the credit supply to private and public sectors is affected by the increased climate risk. In order to examine the climate risk effect from an international comparison, this paper empirically investigates the impact of climate risk on credit supply by using a sample of 174 countries during 2000–2019 from the perspective of the difference between private and public sectors. The results show that climate risk has a significant negative effect on the credit supply to private sector and a positive effect on that to the public sector. Further, we provide new evidence that the climate risk effect has a more significant effect on the private and public sector credit supply in the high-income countries than that in the low-income countries, suggesting a quick risk contagion in the high-income countries. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
26. A Climate Science Toolkit for High Impact‐Low Likelihood Climate Risks.
- Author
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Wood, Richard A., Crucifix, Michel, Lenton, Timothy M., Mach, Katharine J., Moore, Crystal, New, Mark, Sharpe, Simon, Stocker, Thomas F., and Sutton, Rowan T.
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CLIMATOLOGY ,CLIMATE research ,OCEAN circulation ,ICE sheets ,GREEN infrastructure ,FLOOD risk ,CLIMATE change - Abstract
An important component of the risks from climate change arises from outcomes that are very unlikely, but whose impacts if they were to occur would be extremely severe. Examples include levels of surface warming, or changes in the water cycle, that are at the extreme of plausible ranges, or crossing of a climate system "tipping point" such as ice sheet or ocean circulation instability. If such changes were to occur their impacts on infrastructure or ecosystems may exceed existing plans for adaptation. The traditional approach of ensemble climate change projections is not well suited to managing these High Impact‐Low Likelihood (HILL) risks, where the objective is to "prepare for the worst" rather than to "plan for what's likely." In this paper we draw together a number of ideas from recent literature, to classify four types of HILL climate outcome and to propose the development of a practical "toolkit" of physical climate information that can be used in future to inform HILL risk management. The toolkit consists of several elements that would need to be developed for each plausible HILL climate outcome, then deployed individually to develop targeted HILL risk management approaches for individual sectors. We argue that development of the HILL toolkit should be an important focus for physical climate research over the coming decade, and that the time is right for a focused assessment of HILL risks by the Intergovernmental Panel on Climate Change in its 7th Assessment Cycle. Plain Language Summary: To prepare for the risks that arise from climate change (and avoid them where possible), it is important to understand how climate is likely to change in future, and what the impacts are likely to be. Over many years, climate science has developed sophisticated climate projections to estimate these likely impacts, and these are widely used to plan how people and societies will need to adapt to climate change. However it is also important to understand possibilities that are unlikely, but would have even more severe impacts if they did occur—for example, global warming levels at the high end of plausible estimates, or crossing a "tipping point" for major changes in ice sheets or ocean currents. A different type of information is needed to plan for these risks. In this paper we propose a new set of climate information "tools" to respond to these high‐impact risks. The tools include plausible scenarios of extreme outcomes, and early warning systems to detect if they are on the horizon. Combining these new tools with existing climate projections will allow society to understand more fully the risks of climate change, and to plan for the likely effects while preparing for the worst. Key Points: Climate outcomes or events that have a high impact are a key component of climate risk, even if their likelihood is lowTraditional climate projections are of limited use to inform management of high impact‐low likelihood risksPhysical climate science needs an increased focus on storylines, early warning and monitoring to inform management of high impact risks [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
27. Bridging socioeconomic pathways of CO2 emission and credit risk.
- Author
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Bourgey, Florian, Gobet, Emmanuel, and Jiao, Ying
- Subjects
CREDIT risk ,CARBON emissions ,CLIMATE change - Abstract
This paper investigates the impact of transition risk on a firm's low-carbon production. As the world is facing global climate change, the Intergovernmental Panel on Climate Change (IPCC) has set the idealized carbon-neutral scenario around 2050. In the meantime, many carbon reduction scenarios, known as Shared Socioeconomic Pathways (SSPs) have been proposed in the literature for different production sectors in a more comprehensive socio-economic context. We consider, on the one hand, a firm that aims to optimize its emission level under the double objectives of maximizing its production profit and respecting the emission mitigation scenarios. Solving the penalized optimization problem provides the optimal emission according to a given SSP benchmark. On the other hand, such transitions affect the firm's credit risk. We model the default time by using the structural default approach. We are particularly concerned with how, by following different SSPs scenarios, the adopted strategies may influence the firm's default probability. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
28. Drought and Cattle: Implications for Ranchers.
- Author
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Rodziewicz, David, Dice, Jacob, and Cowley, Cortney
- Subjects
EFFECT of drought on cattle ,AGRICULTURAL industries ,CATTLE industry ,FARM income ,HAY ,ANIMAL herds - Abstract
Drought has become more intense and frequent in many areas of the United States in recent years. Despite growing concerns about drought’s effects on the agricultural sector, few studies have quantified its effects on the cattle industry. In this paper, we estimate the effects of drought on cattle herd management, hay production, hay prices, and farm income in the United States from 2000 to 2022. We find that drought reduces hay production and leads to higher hay prices. We also find that drought contributes to herd liquidation: as drought intensity increases, average herd size declines. These declines in average herd size lead revenues to temporarily increase, perhaps due to farmers selling larger quantities of market and breeding stock. Finally, we find that drought is correlated with lower farm incomes. Overall, our results suggest drought has a temporary positive effect on rancher revenues, but a negative effect on earnings. [ABSTRACT FROM AUTHOR]
- Published
- 2023
29. Effectively managing risks in an ESG portfolio.
- Author
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Bertolotti, Andre
- Subjects
SUSTAINABLE investing ,INVESTMENT risk ,REPUTATIONAL risk ,RISK managers ,FINANCIAL risk - Abstract
Environmental, social and governance (ESG) integration into active and passive portfolios is now a key part of the fast-growing area of sustainable investing. As portfolio managers integrate ESG into their strategies, they add new components of risk that are in addition to the traditional financial risks familiar to chief investment officers (CIOs) and risk managers. In this paper, the author reviews ESG risks from the practitioner's point of view, including risks found in ESG data itself that stem from the definition, collection and aggregation process. The author then discusses the portfolio characteristics associated with integrating ESG data as well as the challenges in building tools to measure risk and report on attribution. Next, he looks at connections between screening and reputational risks and the beneficial role that engagement can play. Finally, he discusses tail risks and reviews the role that physical climate risk plays in managing portfolios. [ABSTRACT FROM AUTHOR]
- Published
- 2020
- Full Text
- View/download PDF
30. Assessing agricultural drought management strategies in the Northern Murray-Darling Basin
- Author
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Atifa Asghari, Isabella Aitkenhead, Andrew B. Watkins, Jessica Bhardwaj, and Yuriy Kuleshov
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Atmospheric Science ,010504 meteorology & atmospheric sciences ,media_common.quotation_subject ,0211 other engineering and technologies ,02 engineering and technology ,01 natural sciences ,Drought preparedness ,Natural hazard ,Climate risk ,Earth and Planetary Sciences (miscellaneous) ,0105 earth and related environmental sciences ,Water Science and Technology ,media_common ,021110 strategic, defence & security studies ,Original Paper ,Climate resilience ,business.industry ,Australia ,Early warning system for drought ,Hazard ,Shire ,Agricultural Drought Management Strategy ,Geography ,Agriculture ,Early warning system ,Northern Murray–Darling Basin ,Psychological resilience ,Water resource management ,business - Abstract
The Northern Murray–Darling Basin (MDB) is a key Australian agricultural region requiring efficient Agricultural Drought Management (ADM), focused on resilience. Although a need for resilience in local farming communities has long been recognised, previous studies assessing ADM in the Northern MDB did not consider two key elements of resilient management: proactivity (preparing for drought prior to a drought event) and suitability (localised drought management targeted at decision-makers). This study assessed the current ADM Strategy (ADMS) implemented within five selected Northern MDB Local Government Areas (LGAs) (Paroo Shire, Balonne Shire, Murweh Shire, Maranoa Region, and Goondiwindi Region), specifically investigating the extent of ADMS proactivity, effectiveness, and suitability. To investigate suitability, drought risk extent of each LGA was determined. A region-specific drought risk index consisting of hazard, vulnerability and exposure indices was developed; risk mapping was conducted. All LGAs displayed very high levels of drought risk due to hazardous climatic conditions, vulnerable socio-economic attributes, and drought-exposed geographical features. A Criteria-Based Ranking (CBR) survey produced a quantitative effectiveness and proactivity rank for each major ADMS used in the Northern MDB. Government Assistance was the most proactive and effective ADMS. Strategy effectiveness ranks of the major ADMS used and drought risk extent found in each LGA were correlated to determine ADMS suitability. Overall, Balonne Shire and the Goondiwindi Region were identified as high priority areas requiring improved ADM. A user-centred Integrated Early Warning System (I-EWS) for drought could potentially increase ADM proactivity and suitability in such areas, strengthening drought resilience of farming communities.
- Published
- 2020
31. The impact of climate hazards to airport systems: a synthesis of the implications and risk mitigation trends.
- Author
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Voskaki, Asimina, Budd, Thomas, and Mason, Keith
- Subjects
AIRPORTS ,CLIMATE change ,CLIMATE sensitivity ,HAZARDS - Abstract
Climate hazards have only fairly recently been acknowledged as key risk factors for airports. While there is a growing body of research examining specific climate change impacts, there is only limited work that combines this literature with overall climate risk. This paper seeks to address this gap in the literature by investigating and synthesising findings from studies relating to historical airport sensitivity to climate hazards and offering insights on the overall climate risk for the global airport system. With airports increasingly needing to become more "climate-resilient" due to projected changes in global climate, airport planners and decision-makers face challenges in terms of identifying key priority areas for resilience planning and investment. The findings of the paper provide insights into these challenges by examining best-applied practices and current levels of vulnerability. The paper supports the wider inclusion of climate risks as a key factor in airports' planning and operational processes. This will require transforming current management cultures to enhance an airport's operational ability to respond to climate events efficiently and recover quickly in the event of a disruption. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
32. Study on the Influence Mechanism and Adjustment Path of Climate Risk on China's High-Quality Economic Development.
- Author
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Zhao, Jingfeng and Sun, Fan
- Abstract
The quantitative analysis of the economic impact of climate risk is an effective means of understanding and taking reasonable preventative steps in relation to the climate-related economic crisis. This paper takes panel data from China's 31 provinces for 2009 to 2021, combined with a regulating intermediary effect model, to determine the climate risk faced in China and its influence mechanism on high-quality economic development, in an attempt to determine how to adjust the path. The results show that, first, when using a different regression model, we see that climate risks pose a significantly inhibiting effect on high-quality economic development in China. Secondly, when the climate risk increases by 1%, high-quality economic development drops by 0.0115%. When the climate risk increases by 1%, this leads to a 14.9672% increase in the likelihood of natural disasters, causing high-quality economic development to be indirectly reduced by 0.1300%. Thirdly, green innovation has a multidimensional effect; it can both directly and indirectly impact the negative effects of inhibition, and indirect adjustment has a greater effect than direct adjustment. Such regulation has a greater effect on the input than on the output. Therefore, we should seek to more accurately understand the dangers of climate risk, effectively improve the five aspects of development, and strengthen the input of green innovation and thus the output of high-quality economic development in China. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
33. Quantifying Causality between Climate Change and Credit Risk: A Bibliometric Study and Research Agenda.
- Author
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Mngadi, Noluthando and Twinomurinzi, Hossana
- Abstract
There is increasing pressure on organisations and countries to manage the financial risks associated with climate change. This paper summarises research on climate change, credit risk and the associated losses, and specifically identifies methods that could contribute to quantifying the causal relationships between climate change and credit risk. We conducted a bibliometric analysis using the Web of Science database to analyse 3138 documents that investigated climate change and credit risk. The key results reveal that climate change has a quantifiable effect on credit risk, and that the most affected industries or sectors are energy, transportation/mobility, agriculture and food, manufacturing, and construction. The prominent methods to quantify causal relationships between climate change and credit risk are regression models, but these are mostly used in preliminary and testing stages. Distance to default and credit risk are the main areas of focus when quantifying climate change and credit risk. Banks are the main type of organisation that have sought to quantify the causal relationship. We identify a research agenda to quantify these causal relationships. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
34. Improving drought resilience in Northern Murray-Darling Basin farming communities: Is forecast-based financing suitable?
- Author
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Isabella Aitkenhead, Andrew B. Watkins, Jessica Bhardwaj, Atifa Asghari, and Yuriy Kuleshov
- Subjects
Finance ,Atmospheric Science ,Government ,Original Paper ,business.industry ,media_common.quotation_subject ,Climate risk ,Drought resilience ,Australia ,Murray-Darling Basin ,Service provider ,User-centred integrated early warning system for drought ,Forecast-based financing ,Proactive assistance ,Geography ,Agriculture ,Preparedness ,Natural hazard ,Earth and Planetary Sciences (miscellaneous) ,Early warning system ,Psychological resilience ,business ,Water Science and Technology ,media_common - Abstract
A trend towards drier conditions during the April to October ‘cool’ season across southern Australia has been observed in the past few decades. Frequent and prolonged droughts have a significant impact on the financial stability of affected farming communities. Forecast-based Financing (FbF) is a novel proactive aid approach that provides support measures to increase resilience during the window between drought early warnings, and the actual onset and intensification of drought. Using the Northern Murray-Darling Basin as a case study, we investigated whether FbF combined with a user-centred Integrated Early Warning System (I-EWS) for drought has the potential to increase the drought resilience of Australian farming communities. This study shows that farming businesses most impacted by drought have three common factors: (i) lower levels of business management skills, (ii) lower levels of pre-drought preparedness during non-drought periods, and (iii) slower responses when the intensity of drought increases. The results suggest that FbF in its current form is not recommended for a market economy such as Australia, as forms of direct assistance may have adverse long-term effects through disrupting the market itself and may not encourage farm operators to regularly assess and adapt their drought management strategies. Results also suggest that providing farmers, service providers, and all levels of government with tools that incorporate a user-centred I-EWS for drought can improve overall decision-making before, during, and even after drought. This change from a reactive to a proactive approach to managing drought impacts can be a highly effective form of increasing the drought resilience of farming communities.
- Published
- 2020
35. Evaluating Energy Security using Choquet Integral: analysis in the southern E.U. countries
- Author
-
Bilbao-Terol, Amelia, Cañal-Fernández, Verónica, and Gónzalez-Pérez, Carmen
- Published
- 2023
- Full Text
- View/download PDF
36. Modelling the impact of climate change risk on supply chain performance.
- Author
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Er Kara, Merve, Ghadge, Abhijeet, and Bititci, Umit Sezer
- Subjects
CLIMATE change models ,SUPPLY chains ,COGNITIVE maps (Psychology) ,INVENTORY costs ,CLIMATE change - Abstract
Climate change is among the top global risks due to its growing adverse impact on businesses. However, few empirical studies address this imminent risk from a supply chain perspective. Due to a lack of established approaches for capturing complex interaction between climate change risk and supply chain performance, a three-phase mixed methodology approach was attempted. A cognitive map first captured the inter-relationships based on a mental model established by a group of experts. Later, a survey gathered from industry practitioners assessing causal relationships identified key climate change factors and most influenced supply chain performance dimensions. Finally, a system dynamics model supported by multiple case scenarios assessed the implications of climate change on supply chain performance. The results indicated a significant reduction in the availability of natural resources/raw material and capacity, leading to increase in stock-outs, inventory costs and bottlenecks disrupting procurement, manufacturing and logistics functions. Supply chain performance captured through efficiency and effectiveness shows a negative trend with increasing climate change consequences. The systems approach followed in this paper contributes by providing a quantitative model for assessing the impact of climate change risk on supply chain performance. [ABSTRACT FROM AUTHOR]
- Published
- 2021
- Full Text
- View/download PDF
37. Social-ecological vulnerability to climate change and risk governance in coastal fishing communities of Bangladesh.
- Author
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Sultana, Rumana, Irfanullah, Haseeb Md., Selim, Samiya A., and Alam, Md. Shafiul
- Subjects
FISHING villages ,FISH communities ,ECOSYSTEM services ,FISH conservation ,PAYMENTS for ecosystem services ,FISHERY policy ,CLIMATE change - Abstract
In Bangladesh, fishing communities are one of the most climate-vulnerable groups, though they play an important role in economic development. The main objective of this study was to identify vulnerability by exploring exposure (i.e., lack of regulating services or household capitals), susceptibility (i.e., lack of access to provisioning services), and lack of resilience (i.e., lack of alternative livelihoods and capacity) and to explore adaptation options, and challenges to understand risk governance. The study considered 45 published research articles for analysis following Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. Keywords were used in combinations (e.g., fishing communities and Bangladesh) to identify and screen published articles. Articles published in English focusing on vulnerability and/or risk governance, published between 2011 and 2022, featuring original empirical data or a comprehensive systematic review, and published in peer-reviewed journals were included. Articles were excluded if vulnerability and risk governance were evaluated but did not fit or match the definition used in this study. The study found frequent disasters and ocean warming caused different stresses, such as reduced fish catch and income, and resulted in an increased risk of fisheries conflict. Moreover, fishing communities have limited access to properties, modern fishing equipment, financial institutions, and fisher-centered organizations. Adaptation strategies include ecosystem-based (e.g., plantation, payment for ecosystem services) and non-ecosystem-based (e.g., temporary migration, getting help from neighbors) approaches. To boost fish production, the Government of Bangladesh instituted fishing restrictions and social safety net programs (e.g., distributing rice during the fishing restrictions); both initiatives were helpful. However, the conservation policies are not being implemented properly, and there is no particular social welfare, such as banking systems, and low- or no-interest loans being provided that may support fishers to buy fishing equipment or generate alternative income sources. Considering the previous evidence of risks, this paper recommends that fisheries conservation policies be implemented properly, and fishing communities be provided with insurance services and no- or low-interest loans. This will contribute to reducing the climate-induced social-ecological risk and improve sustainable livelihoods that can withstand any regional, national, or local crisis. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
38. Forty years of climate risk research in Zimbabwe – 1980–2021.
- Author
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Dube, Nqobizitha
- Subjects
- *
CLIMATE change adaptation , *CLIMATE research , *RISK-taking behavior , *GREEN infrastructure , *TRADITIONAL ecological knowledge , *WATER shortages , *TRADITIONAL knowledge - Abstract
Identifying sound strategies to manage climate risks requires understanding complex systems, characterised by; a large number of potential factors that interact; multiple stakeholder constituencies with diverse values, deep and dynamic uncertainties. This paper assesses the general understanding and dominant narrative regarding climate change in particular societies in order to track the trends regarding the management of climate risk. In this regard, this paper considers climate risk from a Zimbabwean perspective between 1980 and 2021. The assessment of climate risk in Zimbabwe took cognisance of the fact that climate change is a subject that has received a considerable amount of attention in Zimbabwean focused literature. As such, secondary data were used to understand the dominant narratives regarding climate risk in Zimbabwe. The climate risk discussion in Zimbabwe has significantly grown over past four decades nonetheless, it is evident that the dominant narrative is biased towards climate change adaptation particularly on aspects of agricultural and livelihoods sensitivity from a water scarcity perspective. Other adaptation components such as the exposure to hazards, indigenous knowledge systems, ecological and infrastructure vulnerability, communication and gender dimensions of climate change also form the bulk of issues that dominate the adaptation centred narrative. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
39. A new framework for using weather‐sensitive surplus power reserves in critical infrastructure.
- Author
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Fallon, James, Brayshaw, David, Methven, John, Jensen, Kjeld, and Krug, Louise
- Subjects
INFRASTRUCTURE (Economics) ,TELECOMMUNICATION systems ,ELECTRIC power consumption ,RENEWABLE energy transition (Government policy) ,ENERGY consumption - Abstract
Reserve power systems are widely used to provide power to critical infrastructure systems in the event of power outages. The reserve power system may be subject to regulation, typically focussing on a strict operational time commitment, but the energy involved in supplying reserve power may be highly variable. For example, if heating or cooling is involved, energy consumption may be strongly influenced by prevailing weather conditions and seasonality. Replacing legacy assets (often diesel generators) with modern technologies could offer potential benefits and services back to the wider electricity system when not in use, therefore supporting a transition to low‐carbon energy networks. Drawing on the Great Britain telecommunications systems as an example, this paper demonstrates that meteorological reanalyses can be used to evaluate capacity requirements to maintain the regulated target of 5‐days operational reserve. Across three case‐study regions with diverse weather sensitivities, infrastructure with cooling‐driven electricity demand is shown to increase energy consumption during summer, thus determining the overall capacity of the reserve required and the availability of 'surplus' capacity. Lower risk tolerance is shown to lead to a substantial cost increase in terms of capacity required but also enhanced opportunities for surplus capacity. The use of meteorological forecast information is shown to facilitate increased surplus capacity. Availability of surplus capacity is compared to a measure of supply–stress (demand‐net‐wind) on the wider energy network. For infrastructure with cooling‐driven demand (typical of most UK telecommunication assets), it is shown that surplus availability peaks during periods of supply–stress, offering the greatest potential benefit to the national electricity grid. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
40. Climate transition risk in determining credit risk: evidence from firms listed on the STOXX Europe 600 index.
- Author
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Ramos-García, Daniel, López-Martín, Carmen, and Arguedas-Sanz, Raquel
- Subjects
CREDIT risk ,COUNTERPARTY risk ,PARIS Agreement (2016) ,PANEL analysis ,CLIMATE change - Abstract
This paper assesses whether a climate factor is relevant to measure default risk in a sample of main companies listed on the STOXX Europe 600 exchange from 2010 to 2020. The starting point is a factorial panel data model which is subsequently modified to capture the climate impact through different functional forms. We find that relevant differences in default risk exist before and after the Paris Agreement. Our analysis also indicates that this difference cannot be explained by means of traditional financial factors. Finally, we further show that a climate change risk and opportunities label is a significant factor in evaluating credit risk, both prior to and post-Paris agreement. These results are important to the extent that they suggest that companies' market performance itself allows to measure differences in credit risk between companies and to link them with climate risk factors. This approach may be useful as a complement or in combination with the traditional use of exogenous climate factors that have been widely used in the literature in this field. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
41. IMPACT OF CLIMATE CHANGE ON GLOBAL ECOSYSTEM AND SDGS.
- Author
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Sarangi, Unmana
- Subjects
CLIMATE change ,COVID-19 pandemic ,HUMANITY ,ATMOSPHERIC models ,WELL-being - Abstract
The research paper entitled "Impact of Climate Change on Global Ecosystem and SDGs" is an attempt to define the climate change, its scope, adaptability, vulnerability and risk particularly in the context of its direct impact on cities globally. It is observed and learnt from various research studies and recent literature review on climate change impact and risks associated with it not only on the cities globally, but also its severe impact on the ecosystem due to its variability and forms as there are variations/changes/occurrences of climate hazards at different points of time including the uncertainty of climate change hazards and vulnerabilities associated with it. The onset of COVID-19 pandemic and its severity have also put tremendous pressure on the ecosystem and have resulted in climatic disorders thereby leading to serious imbalances in climate change across the ecosystem. A mention has also been made particularly with regards to the role of UN Security Council and the UNDRR agency in addressing climate change hazards, vulnerabilities, risks globally. The study has made a mention of the recent research studies/literature review on climate change and its impact on the ecosystem in the context of posing a threat to humanity and its wellbeing and health of the global ecosystem, integration of disaster risk reduction and climate change adaptation, impact of climate change on SIDS, adapting to new climate reality, nature-based solutions & natural variability, climate risk response, physical hazards and socioeconomic impacts and response, assessment and computation of climate change models capturing the related probabilistic functions, regressive behavior and non-linearity of climate change risk models etc., The paper also focuses on the quantitative assessment of climate change risk at an urban scale, impact on infrastructure services, process of decarbonization at scale including review of recent progress and outlook for future, research on downscaling of large-scale climate change to a local scale and its integration with the global scale and its effects, The other aspects covered in the study include major challenges in climate change, simulation of urban development and micro climate and vulnerability, risk identification in climate change, vulnerability of economy and wealth, ecosystem and biodiversity, resource availability, climate forcing among others. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
42. Navigating tensions in climate change-related planned relocation.
- Author
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Gini, Giovanna, Piggott-McKellar, Annah, Wiegel, Hanne, Neu, Friedrich Nikolaus, Link, Ann-Christine, Fry, Claudia, Tabe, Tammy, Adegun, Olumuyiwa, Wade, Cheikh Tidiane, Bower, Erica Rose, Koeltzow, Sarah, Harrington-Abrams, Rachel, Jacobs, Carolien, van der Geest, Kees, Zivdar, Narjes, Alaniz, Ryan, Cherop, Carolyne, Durand-Delacre, David, Pill, Melanie, and Shekhar, Himanshu
- Subjects
- *
CLIMATE change adaptation , *CLIMATE justice , *PLANNED communities , *RESEARCH personnel , *CLIMATE change - Abstract
The planned relocation of communities away from areas of climate-related risk has emerged as a critical strategy to adapt to the impacts of climate change. Empirical examples from around the world show, however, that such relocations often lead to poor outcomes for affected communities. To address this challenge, and contribute to developing guidelines for just and sustainable relocation processes, this paper calls attention to three fundamental tensions in planned relocation processes: (1) conceptualizations of risk and habitability; (2) community consultation and ownership; and (3) siloed policy frameworks and funding mechanisms. Drawing on the collective experience of 29 researchers, policymakers and practitioners from around the world working on planned relocations in the context of a changing climate, we provide strategies for collectively and collaboratively acknowledging and navigating these tensions among actors at all levels, to foster more equitable and sustainable relocation processes and outcomes. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
43. Systematic Mapping of Climate Change Impacts on Human Security in Bangladesh.
- Author
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Sultana, Ferdous, Petzold, Jan, John, Sonali, Muehlberger, Verena, and Scheffran, Jürgen
- Subjects
EVIDENCE gaps ,HUMAN security ,POOR people ,ENVIRONMENTAL refugees ,WATER security - Abstract
There is an increasing consensus that climate change undermines human security by exacerbating existing challenges, acting as a "threat multiplier". Bangladesh is a climate hot spot due to its geographical location, dense population and vulnerable socio-economic infrastructure. Although there is an increasing number of studies on the impacts of climate change in Bangladesh, aggregated research that combines this evidence and provides a comprehensive overview is lacking. The aim of this research is to thoroughly investigate the characteristics of the academic literature on the complex pathways through which climate variability affects different components of human security in Bangladesh, allowing for determination of the trends and research gaps, as well as whether they lead to conflict or cooperation. We used a systematic mapping methodology to search and screen 1839 publications in Web of Science, including 320 publications for the final synthesis. We found a predominant research focus on rural areas, especially in the southwestern region, with declining crop yield, economic loss, migration, water shortage, food scarcity and health hazards being the highlighted impacts of climate change for Bangladesh. The impacts on food, economic, environmental, health and water security have been well studied, but we found significant research gaps in some human security components, especially energy security. Women and the economically disadvantaged are disproportionately affected, and the causal pathways between conflict or cooperation and the ever-changing climate lack research efforts, implying a dire need to focus on under-researched areas before they become more complex and difficult to address. Policies and interventions should prioritise climate-resilient agricultural practices and infrastructure in high-risk areas, building local capacities and integrating climate risk assessments into urban planning, considering the high influx of environmental migrants. This systematic map provides a foundation for future longitudinal studies, establishes a baseline for this era for future comparisons and serves as a reliable database for relevant stakeholders and policy makers. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
44. The Impact of Climate Variability on the Private Sector
- Author
-
Miia Parnaudeau and Jean-Louis Bertrand
- Subjects
Finance ,Government ,White paper ,Empirical research ,business.industry ,Climate risk ,Climate change ,Asset (economics) ,business ,Private sector ,Quarter (United States coin) - Abstract
A ground-breaking new research report has been released today by the analysts at Meteo Protect demonstrating that despite the best efforts of government leaders and international organizations to lead the response to climate change, their efforts have not been able to galvanize the key players who can make a difference. In fact, not only are they not engaged, they do not even know they are already at risk.A new White Paper from Meteo Protect modelling the impact of climate variability on the private sector finds that climate change is already making a significant impact in the profits of companies operating in sectors exposed to weather. Directly challenging the direction of present empirical research, and the consensus of how to respond to climate change, it identifies how and why private industry, including companies and investors, must act immediately to manage the consequences of climate change.Indeed, the extent to which the vast majority of companies are presently exposed to climate variability is likely to be a revelation for many analysts, investors and even companies executives themselves. Demonstrating that billions of dollars are at risk each quarter, continuing to go unreported and unmanaged, the researchers call for the provision of actionable and objective indicators to measure the exposure to climate risk and the implementation of mitigating weather hedging strategies to protect financial performance.A must-read for finance executives, investors, asset managers and business analysts, the White Paper takes a new approach to tackling a long-standing and unresolved problem, making it understandable, relevant and manageable.
- Published
- 2015
45. Climate risk as a key risk for the energy sector.
- Author
-
SOBIK, Bartosz
- Subjects
ENERGY industries ,INTERNATIONAL cooperation on climate change ,CARBON emissions - Abstract
Copyright of Business Administration Quarterly / Kwartalnik Nauk o Przedsiebiorstwie is the property of SGH Warsaw School of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
- Published
- 2022
- Full Text
- View/download PDF
46. Analysing climate risk in the banking sector: To what extent should the onus be on banks to fund the 'green deal' while focusing on their own climate change and ESG risk profile?
- Author
-
Bennett, Richard
- Subjects
ENVIRONMENTAL responsibility ,EARTH temperature ,CLIMATE change ,METEOROLOGICAL stations ,PLANETARY surfaces ,BANK customers - Abstract
Planet Earth's temperature has risen by about 1.1 degrees Celsius on average since the 1880s, confirmed by satellite measurements and by the analysis of hundreds of thousands of independent weather station observations from across the globe. This rate of warming is in an order of magnitude faster than any found in the past 65 million years of paleoclimate records — the rapid decline in the planet's surface ice cover provides further evidence of this.
1 The banking industry is the custodian of global finance. It therefore has a central role to play in mitigating against this trend. After all, these are the institutions that occupy a key position as important catalysts in reorienting financial flows towards sustainable activities, supporting industries and governments in meeting climate risk and their environmental, social and governance (ESG) targets. However, should the onus be on the banking sector to drive this agenda? Yes, it has an important role to play, but should it be writing the overall global narrative? We will look at what banks are doing now to measure, and act upon, their own climate risk and ESG profile, and look at how much we should expect them to fund the overall 'green deal' or 'clean' strategy throughout 2022 and beyond. However, let us not forget, the banking sector has been focussing on money rather than ESG matters for centuries. For those new to the subject, we will also use this paper to provide some step-by-step advice and suggestions for what banks should be doing now to prepare for ESG issues. The paper opens with the theory, then moves into the practical, with a series of first-hand case studies. These cover the measures that Razor Risk's banking clients have been introducing to mitigate against climate risk, providing a critical reference point for the sector as a whole. [ABSTRACT FROM AUTHOR]- Published
- 2022
- Full Text
- View/download PDF
47. Risk transmission of El Niño-induced climate change to regional Green Economy Index.
- Author
-
Zhang, Li, Li, Yan, Yu, Sixin, and Wang, Lu
- Subjects
SUSTAINABLE development ,CLIMATE change ,SOUTHERN oscillation ,WEATHER & climate change ,ECONOMETRIC models ,CLIMATE extremes - Abstract
Global warming and rare weather caused by climate change continue to affect ecosystems, human health, and economic systems, which pose serious climate risk challenges for humanity. To address and adapt to climate change risks and to facilitate the process of achieving carbon peaking and carbon-neutral targets, the financial industry has become more concerned about the information spillover effects of extreme climate events on green financial products. Therefore, this paper adopts the Southern Oscillation Index (SOI) to describe climate change and investigates the influence of the SOI on the volatility of the NASDAQ OMX Green Economy Index (OMX-GEI) under a variant of the Double Asymmetric GARCH-MIDAS (DA-GM-X) model. The results show that the SOI provides relevant information for OMX-GEI volatility forecasting and the DA-GM-X model yields outstanding forecasting performance in statistical and economic terms. This conclusion indicates that considering SOI and its asymmetry changes can significantly improve the prediction accuracy of econometric models. Also, several robustness tests confirm our findings. Overall, the findings of this paper suggest that to achieve the two-carbon goal and combat climate change, governments should pay more attention to policy formulation that combines environment, climate, health, energy, and economy, and actively promote green, low-carbon, and sustainable energy development globally. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
48. Incorporating Climate Risk into Credit Risk Modeling: An Application in Housing Finance.
- Author
-
Lefevre, Alexandra and Tourin, Agnes
- Subjects
CREDIT risk ,HOUSING finance ,MORTGAGE loan default ,HURRICANE Harvey, 2017 ,DEFAULT (Finance) - Abstract
This paper examines the integration of climate risks into structural credit risk models. We focus on applications in housing finance and argue that mortgage defaults due to climate disasters have different statistical features than default due to household-specific reasons. We propose two models incorporating climate risk based on two separate default definitions. The first focuses on default as a response to a decrease in home value, and the second defines default as a consequence of missed mortgage payments. Using mortgage performance data during Hurricane Harvey, we conduct an empirical study whose results suggest that climate events are potentially another source of undiversifiable credit risk affecting homeowners' ability to make contractual monthly payments. We also show that incorporating this climate-specific default process may capture additional uncertainty in default probability assessments. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
49. What evidence exists on the impact of climate change on real estate valuation? A systematic map protocol.
- Author
-
Vanhuyse, Fedra, Piseddu, Tommaso, and Moberg, Åsa
- Abstract
Background: As natural disasters increase in both frequency and magnitude because of climate change, assets, such as buildings and infrastructure, are exposed to physical climate risk. In addition, as our societies transition towards a greener economy, the transitional climate risk will manifest itself in different forms: reputational issues, market solutions that may drive out those that do not comply, technological disruptions and policy initiatives. How both risks, physical and transitional, impact the economic value of real estate assets is not well understood and will be investigated as the main scope of this systematic map. Method: we use systematic mapping to collate and configure existing evidence on how climate risk has affected the economic value of real estate assets. After designing a search string, English language peer-reviewed publications will be retrieved from the two largest and most popular scientific research databases, as well as a database containing policy documents. This corpus will be tested for comprehensiveness using a benchmark of 50 highly relevant articles. Once the comprehensiveness test is passed, a consistency test will be carried out on the screening of a randomly selected list of 200 articles by three reviewers. If a kappa score of at least 0.6 is achieved, one of the reviewers will carry out the remainder of the screening, with another reviewer quality assuring 10% of the screening. The retained corpus will then be distributed over the three reviewers, who will carry out the extraction of metadata according to an agreed coding strategy. The final output of the coding will consist of a heat map, showcasing where substantial evidence is available, and research gaps, providing recommendations for further research. In addition, the results will provide insight into the methodology to quantify the impact of climate risk on real estate value. Figures and tables will be designed to make it easy to comprehend the results of the mapping. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
50. How does climate risk affect bank loan supply? Empirical evidence from China.
- Author
-
Li, Shouwei and Wu, Xin
- Subjects
REAL economy ,BANK deposits ,DEPOSIT banking ,BANKING industry ,LOANS ,BANK loans ,DEPOSIT insurance - Abstract
The impact of the climate change on the real economy and financial system has aroused great concern from the Chinese government and financial regulator. The objective of this paper is to examine the impact of climate risk on bank loan supply by using the sample of 403 commercial banks from China over the period 2008–2018 and fixed effects panel regression models. Our empirical studies obtain four findings. First, climate risk has a significant negative impact on the bank loan supply. Second, this adverse effect of climate risk can be mitigated by government's climate protection performance and monetary expansion. Third, climate risk can inhibit loan supply through reducing banks' risk appetites and decreasing their deposits. Finally, the negative influence of climate risk on loan supply is more pronounced for banks with less deposits and banks located in coastal areas. One policy implication is that commercial banks should adjust the structure of credit business and innovate loan products. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
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